Correlation Between Sun Country and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Sun Country and Ameriprise Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sun Country and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Country Airlines and Ameriprise Financial, you can compare the effects of market volatilities on Sun Country and Ameriprise Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sun Country with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Country and Ameriprise Financial.
Diversification Opportunities for Sun Country and Ameriprise Financial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sun and Ameriprise is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sun Country Airlines and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Sun Country is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sun Country Airlines are associated (or correlated) with Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of Sun Country i.e., Sun Country and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Sun Country and Ameriprise Financial
Given the investment horizon of 90 days Sun Country is expected to generate 1.48 times less return on investment than Ameriprise Financial. In addition to that, Sun Country is 1.59 times more volatile than Ameriprise Financial. It trades about 0.09 of its total potential returns per unit of risk. Ameriprise Financial is currently generating about 0.22 per unit of volatility. If you would invest 51,190 in Ameriprise Financial on August 29, 2024 and sell it today you would earn a total of 6,211 from holding Ameriprise Financial or generate 12.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Country Airlines vs. Ameriprise Financial
Performance |
| Timeline |
| Sun Country Airlines |
| Ameriprise Financial |
Sun Country and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Country and Ameriprise Financial
The main advantage of trading using opposite Sun Country and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Country position performs unexpectedly, Ameriprise Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ameriprise Financial will offset losses from the drop in Ameriprise Financial's long position.| Sun Country vs. JetBlue Airways Corp | Sun Country vs. SkyWest | Sun Country vs. International Consolidated Airlines | Sun Country vs. Spirit Airlines |
| Ameriprise Financial vs. TPG Inc | Ameriprise Financial vs. Carlyle Secured Lending | Ameriprise Financial vs. Brookfield Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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